121 - michael gross

,NNED ON 61612012 w e e e

-against-

KENT M. SWIG, ELIZABETH M. SWIG, THE 740 CORPORATION, and “JOHN DOE # 1” through “JOHN : DOE #lo,” the last ten names being fictitious and unknown : to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having : or claiming an interest in or lien upon the premises described in the Complaint,

Defendants.

- ED:

Index No.:

Plaintiff designates New York County as the place of trial

121.02902

SUMMONS

The basis of venue is Plaintiffs residence: Location of Co-op Shares and Proprietary Lease

Plaintiff has an office at: 11 1 Westminster Street

To the above named Defendants:

YOU ARE HEREBY SUMMONED to answer the Verified Complaint in this action

and to serve a copy of your Verified Answer on the plaintiff’s attorney with twenty (20) days

after the service of this Summons, exclusive of the day of service of this Summons, or with thirty

(30) days after service of this Summons is complete if this Summons is not personally delivered

to you with the State ofNew York,

In case of your failure to answer this Summons, a judgment by default will be taken

against you for the relief demanded in the Verified Complaint, together with the costs of this >”’ .

,, + action.

NOTICE

, I

*j’ ‘ i

\ ‘,>,,,) YOU ARE IN DANGER OF LOSING YOUR HOME ‘ S J ~ ~ N 0 5,3!2

- 3

If you do not respond to this summons and complaint by ~e~~~~~~~~~~~ answer on the attorney for the mortgage company who filed this foreclosurd#@V$- -a

against you and filing the answer with the court, a default judgment may be entered and you can lose your home.

. A

Speak to an attorney or go to the court where your case is pending for further information on how to answer the summons and protect your property.

5033875v.4

Supreme Court Records OnLine Library - page 1 of 24

W c

Sending a payment to your mortgage company will not stop this foreclosure action.

YOU MUST RESPOND BY SERVING A COPY OF THE ANSWER ON THE ATTORNEY FOR THE PLAINTIFF (MORTGAGE COMPANY) AND FILING THE ANSWER WlTH THE COURT.

Dated: New York, New York June 4,2012

/ Marie Polito%ofsdal L ,j Kathleen Daly

Atlorneys for Bank of America I50 East 42nd Street New York, New York 10017-5639 (2 12) 490-3000

TO:

Kent M. Swig 530 Park Avenue Apt. 12G New York, New York 10065

Elizabeth M. Swig 740 Park Avenue Unit 2/3 D New York, New York I002 1

The 740 Corporation c/o Brown Harris Stevens Residential Management LLC 770 Lexington Avenue New York, New York 10065

2 5033875v.4


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Help for Homeowners in Foreclosure

New York State Law requires that we send you this notice about the foreclosure process. Please read it carefully.

Summons and Complaint

You are in danger of losing your home. If you fail to respond to the summons and complaint in this foreclosure action, you may lose your home. Please read the summons and complaint carefully. You should immediately contact an attorney or your local legal aid office to obtain advice on how to protect yourself.

Sources of Information and Assistance

The State encourages you to become informed about your options in foreclosure. I n addition to seeking assistance from an attorney or legal aid office, there are government agencies and non-profit organizations that you may contact for information about possible options, including trying to work with your lender during this process.

To locate an entity near you, you may call the toll-free helpline maintained by the New York State Department of Financial Services at 1-800-269-0990 or visit the Department's website http: / /www.dfSm ny.gov.

3 5033875v.4


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Foreclosure rescue scams

Be careful of people who approach you with offers to "save" your home. There are individuals who watch for notices of foreclosure actions in order to unfairly profit from a homeowner's distress. You should be extremely careful about any such promises and any suggestions that you pay them a fee or sign over your deed. State law requires anyone offering such services for profit to enter into a contract which fully describes the services they will perform and fees they will charge, and which prohibits them from taking any money from you until they have completed all such promised services.

4 5033875v.4


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Plaintiff,

-against- : VERIFIED COMPLAINT

KENT M. SWIG, ELIZABETH M. SWIG, THE 740 CORPORATION, and “JOHN DOE # I ” through “JOHN : DOE #lo,” the last ten names being fictitious and unknown : to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having : or claiming an interest in or lien upon the premises described in the Complaint,

Defendants.

Plaintiff, Bank of America, N.A. (“BofA”), successor by merger to United States Trust

Company, N.A., f/k/a United States Trust Company of New York by its attorneys, Wilson, Elser,

Moskowitz, Edelman & Dicker, LLP, as and for its Verified Complaint against Defendants,

alleges as follows:

1. BofA is, and at all times hereinafter mentioned was, a national banking

association chartered under the laws of the United States which maintains a principal place of

business in Charlotte, North Carolina, and is authorized to conduct business in the State of New

York.

2. By reason of‘ BofA’s purchase and acquisition of, and subsequent merger with

United States Trust Company, N.A., f/k/a Unitcd States Trust Company of New York (“U.S.

Trust”), BofA succeeded to all right, title and interest 0fU.S. Trust effective as of February 22,

5 5033875v.4


2008. A copy of (i) a BofA Assistant Secretary’s Certificate dated June 10, 201 1 which annexes

a true and correct copy of the official certification of the merger issued by the Comptroller of the

Currency, Administrator of National Banks, dated February 19, 2008, and (ii) a copy of the

United States Federal Reserve System National Information Center Institution History for U.S.

Trust, each of which reflects BofA’s acquisition of U.S. Trust, are annexed hereto as Exhibit

“A.” As a result of said merger, BofA became and is now the owner and holder of all of the loan

documents that are the subject of this action and further described below.

3. Upon information and belief, defendant Kent M. Swig (“K. Swig”) is and was at

all relevant times an individual residing in the County and State of New York.

4. Upon information and belief, defendant Elizabeth M. Swig (“E. Swig”) is and was

at all relevant times an individual residing in the County and State of New York. Defendants K.

Swig and E. Swig shall hereinafter be referred to collectively as the “Swigs.”

5 . Upon information and belief, defendant The 740 Corporation ((‘740 Corp.”) is and

was at all relevant times, a corporation organized and existing pursuant to the laws of the State of

New York, having its principal office at c/o Brown Harris Stevens Residential Management,

LLC, 770 Lexington Avenue, New York, New York 10065, and is the owner of the land and

building located at 740 Park Avenue, New York, New York 1002 1 (the “CO-Op”).

6. 740 Corp. is also the lessor under a certain cooperative apartment Proprietary

Lease (as more fully described herein) and issuer of certain Shares (as more fully described

herein) pertaining to a certain cooperative apartment located in the Co-op, commonly known as

Unit 2/3D, 740 Park Avenue, New York, New York, 10021 (the “Co-op Apartment”).

7. 740 Corp. is joined as a necessary party defendant herein by virtue of any priority

statutory claims and/or liens it may claim upon the Proprietary Lease and/or the Shares

6 5033875v.4


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appurtenant to the Co-op Apartment and to extinguish any non-statutory claims and/or liens

which it may claim, which are subordinate to the liens of BofA.

8. Each of the defendants has or claims to have some interest in or lien upon the

Shares andor Proprietary Lease and/or possession of said Co-op Apartment, which lien or

interest, if any, accrued subsequent to the rights of BofA and is subordinate thereto.

NATURE OF ACTION

9. This is an action by BofA to enforce its security interest and lien which was

granted by the Swigs upon the Shares and Proprietary Lease pertaining to the Co-op Apartment

in order to secure two loans in the respective principal amounts of $4,792,131.51 and

$12,800,000.00 (the “Loans”). The Loans are in significant payment default, with no payments

having been made on either of the Loans since 2009.

10. BofA originally filed this action in the District Court for the Southern District of

New York on about June 17, 201 1 as Case No. 11-CV-135-BSJ (the “Federal Court Action”).

The Federal Court Action was dismissed by the Court prior to the filing of any answers by any of

the defendants by order dated March 14, 2012, which order dismissed the Federal Court Action

on abstention grounds.

11. Besides the Federal Court Action which was dismissed on abstention grounds, no

other action or proceeding has been brought at law or otherwise for the recovery of the sum due

under the Loans or any part thereof,

12. BofA shall not be deemed to have waived, altered, released or changed the

election hereinbefore made by reason of any payments made after the date of commencement of

this action, of any or all of the defaults mentioned hereinafter, and such election shall continue

and remain effective.

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FACTUAL ALLEGATIONS

The 2007 Consolidated Loan in the Principal Amount of $4,792,131.51

13. On or about August 1,2007, K. Swig, as borrower, executed a Change in Terms

Agreement (the “2007 Change in Terms Agreement”) in favor of BofA’s predecessor by

merger, U.S. Trust. A copy of the 2007 Change in Terms Agreement is annexed hereto as

Exhibit “E”.

14. The 2007 Change in Terms Agreement modified and consolidated into a single

loan in the principal amount of $4,792,13 1.5 1 (the “2007 Consolidated Loan”), the outstanding

principal balances due under (i) a Note dated December 3 , 1998 in the original principal amount

of $2,500,000.00 (“Note I ” ) ; and a Note dated November 21, 2002 in the original principal

amount of $2,500,000.00 (“‘Note 2”). See, Exhibit “E” hereto.

1 5. The 2007 Change in Terms Agreement particularly described the pre-existing

collateral which secured Note 1 and Note 2 pursuant to the terms of a certain Security Agreement

dated December 3 , 1998 (“‘Security Agreement I” , Exhibit V’, hereto) and a certain Security

Agreement dated November 21, 2002 ((‘Security Agreement 2”) Exhibit “D” hereto), as

follows:

the debtor(s) interest in all the shares of capital stock of [740 Corp.] allocable to Apartment 2/3D, plus the proprietary lease with [740 Corp.], and any replacement of additional stock and any lease amendments and replacements.

The 2007 Change in Terms Agreement modified, renewed and extended Note 1

and Security Agreement 1 as well as Note 2 and Security Agreement 2 (collectively the “Pre-

Existing Loan Documents”), by inter alia, consolidating the Pre-Existing Loan Documents into

“one Note and Security Agreement as evidenced by this [2007] Change in Terms Agreement and

16,

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a Security Agreement Modification and Consolidation Agreement dated August 1, 2007 in the

original principal amount of $4,792,13 1.5 I .” See, Exhibit “B” hereto.

17. Pursuant to the terms of the 2007 Change in Terms Agreement, K. Swig agreed

to pay to BofA’s predecessor by merger, U.S. Trust, the consolidated principal amount of

$4,792,131.51, together with interest at the interest rates set forth therein, over a 30 year period

commencing September 1, 2007 with a final payment of principal, interest and any other sums

due on the August 1,2037 maturity date. See, Exhibit “B” hereto.

18. The interest rate under the 2007 Change in Terms Agreement was set at a fixed

rate of 6.75% for seven (7) years and thereafter converted to an adjustable rate tied to the one-

year LIBOR plus 2.25%. See, Exhibit “B” hereto.

19. To secure the 2007 Consolidated Loan indebtedness, K. Swig and E. Swig each

duly executed and delivered to BofA’s predecessor by merger, U.S. Trust, a Security Agreement

and Modiiication Consolidation Agreement dated August 1, 2007 (the “2007 Consolidated

Securify Agreement”, Exhibit “E” hereto).

20. The 2007 Consolidated Security Agreement consolidated Security Agreement 1

and Security Agreement 2 and reaffirmed the valid and binding security interest granted by the

Swigs’ with respect to all the shares of capital stock of 740 Corp. allocable to the Co-op

Apartment (the “Shares”) and the Proprietary Lease with respect to the Co-op Apartment (the

“Proprietary Leu&’). See, Exhibit “E” hereto, at 7 6.

21. The 2007 Consolidated Security Agreement further provided that, “[elxcept as

modified herein, all of the terms, covenants and conditions of [Security Agreement 1 and

Security Agreement 21 are ratified, confirmed and approved in all respects and shall remain in

full force and effect.’’ See, Exhibit “E” hereto, at 7 6.

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22. U.S. Trust’s security interest and lien upon the Shares and Proprietary Lease

(collectively, the “Collateral”) securing the 2007 Consolidated Loan was duly perfected by the

filing of UCC-1 financing Statements with the New York City Department of Finance Office of

the City Register as follows: (a) on December 18, 1998 under record number 98PN66689,

designating U.S. Trust as secured party and U.S. Trust Mortgage Service Company as assignee,

as such financing statement was assigned under UCC-3 record number 99PN09169 filed on

February 23, 1999 to Co-op Holdings, Inc., and (b) on December 11, 2002 as record number

02PN32992 designating U.S. Trust Mortgage Service Company as secured party, as such

financing statement was assigned under UCC-3 record number 2003000045742 filed on March

13, 2003 to Co-op Holdings, Tnc. Copies of each of the UCC-1 financing statements and related

UCC-3 financing statement assignments (collectively, the YJCC FiZings’? are annexed hereto

collectively as Exhibit “F”.

23. BofA is presently the secured party in interest holding a perfected security interest

in and to the Collateral as evidenced by the UCC Filings because, before the effective date of its

merger with BofA, U.S. Trust was the survivor of mergers with both UST Mortgage Company

(formerly known as U.S. Trust Mortgage Service Company) and Co-op Holdings, Inc. which

were effective on or about July 2, 2007, and then, on or about February 22, 2008, U.S. Trust

merged into BofA. Copies of the United States Federal Reserve System National lnformation

Center Institution History for each of U.S. Trust, U.S. Trust Mortgage Service Company, UST

Mortgage Company, and Co-op Holdings, Tnc. are annexed hereto collectively as Exhibit “G”.

24. U.S. Trust further perfected its security interest in the Shares by taking possession

of the original stock certificate, dated August 5 , 1997 (the “2997 Stock Certificate”), which

evidenced the Swigs’ ownership of the Shares, as well as the Proprietary Lease. Copies of the

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1997 Stock Certificate and the Proprietary Lease are annexed hereto as Exhibits “H” and

Exhibit “I”, respectively.

The 2009 Loan in the Principal Amount of $12,800,000.00

25. On or about January 6, 2009 defendants K. Swig and E. Swig each executed and

delivered before a notary public a Durable General Power of Attorney appointing William E.

Stempel, Esq. (“Stempel”) as their respective attorney-in-fact in connection with:

The execution and delivery of note, security agreement, UCC financing statement and all other documents necessary or appropriate in connection with a $12.8MM loan made by Bank of America NA to Kent Swig and Elizabeth Swig secured by 845 shares of stock of [740 Corp.] allocated to Apartment 2/3D located at 740 Park Avenue, NY, NY and the proprietary lease appurtenant thereto.

A true copy of the Durable General Power of Attorney executed by K. Swig is 26.

annexed hereto as Exhibit “J”.

27. A true copy of the Durable General Power of Attorney executed by E, Swig is

annexed hereto as Exhibit “K”.

28. On or about January 9, 2009, K. Swig, as Borrower, executed and delivered a

Promissory Note (Fixed Rate) in the principal amount of $12,800,000.00 (the “2009 Loan”)

whereby he agreed to pay BofA monthly installments of interest at an annual rate of 5.925%

beginning in Fcbruary 2009 and to continue making such payments up to January 14, 2012, the

Maturity Date, at which time he agreed to pay the entire unpaid principal sum plus all accrued

interest (the “”2009 Note”). A copy of the 2009 Note is annexed hereto as Exhibit “Le”

29. To secure K. Swig’s obligations under the 2009 Note, both K, Swig and E. Swig

by their attorney-in-fact, Stempel, duly executed and delivered to BofA a Security Agreement

dated January 9, 2009 (the “2009 Security Agreement”), in which the Swigs granted BofA “a

security interest in, a continuing lien upon and a right of setoff’ against . . . . the Collateral

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described in Paragraph 2.” A copy of the 2009 Security Agreement is annexed hereto as Exhibit

“M.”

30.

included:

31.

The Collateral as described in paragraph 2 of the 2009 Security Agreement

Proprietary Lease . . . between [740 Corp.] and [the Swigs] issued with respect to certain space known as Apartment 2/3D in the building located at 740 Park Avenue, NY, N Y 10021. . . and certificate of stock for eight hundred forty five (845) shares of stock (the “Shares”) issued by the Cooperative Corporation appurtenant thereto.

The Collateral also included, inter alia, “all replacements, substitutions, additions

and the like appurtenant to the foregoing.” See, Exhibit “M”, at 7 2.

32. The Swigs, by their attorney-in-fact Stempel, also executed in blank and duly

delivered to BofA a stock power (the “Stock Power”) as additional security for the 2009 Loan.

A copy of the Stock Power is annexed hereto as Exhibit “N.”

33. Under the terms of the 2009 Security Agreement, the Swigs agreed that BofA as

secured party “shall have the right to complete the incomplete Stock Power)’ in connection with

any sale or disposition of the Shares or the Proprietary Lease. See, Exhibit M, at 7 13.

34. Finally, as additional security for the 2009 Loan, the Swigs by their attorney-in-

fact, Sternpel, executed in blank and duly delivered to BofA an Assignment of Proprietary Lease.

A copy of the Assignment of Proprietary Lease is annexed hereto as Exhibit “0.”

35. BofA’s security interest in the Shares and Proprietary Lease was duly perfected

by the filing of a UCC- 1 Statement with the New York City Department of Finance Office of the

City Register on February 16, 2009 as record number 2009000045203. A copy of the UCC-I is

annexed hercto as Exhibit ‘‘P.’’

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36. The Shares and the Proprietary Lease which were granted as Collateral pursuant

to the terms of the 2009 Security Agreement and the 2007 Consolidated Security Agreement are

more fully described in and separately annexed hereto, as Exhibits “H” and “I”, respectively.

THE DEFAULTS

37. The 2007 Change in Terms Agreement and the 2009 Note each contained

provisions which set forth the circumstances by which the Loans would be deemed in default.

The 2007 Consolidated Loan Defaults

38. The 2007 Change in Terms Agreement provides in pertinent part that the

Borrower, K. Swig, will be deemed in default if he fails “to make any payment when due under

the indebtedness” or if he “break[s] any promise made to Lender or fail[s] to perform promptly at

the time and strictly in the manner provided in this Agreement.” See, Exhibit “B”.

39. In the event of a default, BofA has the right to “declare the entire unpaid principal

balance under the [2007 Change in Terms Agreement] and all unpaid interest immediately

due.. . .” See, Exhibit “B”.

40. K. Swig defaulted under the terms of the 2007 Change in Terms Agreement and

the 2007 Consolidated Security Agreement (the “2007 Loan Documents”) by failing to pay the

required monthly principal and interest payments which were due on September 1 , 2009,

October 1 , 2009, December 1 , 2009 and January 1,20 10.

41. No payments have been made under the 2007 Consolidated Loan since August 3,

2009.

42. Accordingly, by letter dated January 19, 2010 (the “2007 Consolidated Loan

Defaault and Acceleration Notice”), BofA notified K. Swig that as a result of the multiple

payment defaults under the 2007 Consolidated Loan, BofA had elected to accelerate the 2007

Consolidated Loan indebtedness and declare all sums outstanding thereunder immediately due

13 503387Sv.4


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and payable. A copy of the 2007 Consolidated Loan Default and Acceleration Notice is annexed

hereto as Exhibit “Q.”

43. K. Swig also agreed, under the terms of the 2007 Change in Terms Agreement, to

pay “all costs and expenses Lender incurs to collect this Agreement.. . [tlhis includes, subject to

any limits under applicable law, Lender’s reasonable attorneys’ fees, and Lender’s legal

expenses whether or not there is a lawsuit.. . .” See, Exhibit B, page 2,

44. As a result of the payment defaults, BofA is presently entitled to immediate

payment in full of the 2007 Consolidated Loan indebtedness.

45.

46.

BofA has performed all of its obligations under the 2007 Loan Documents.

There is presently due and owing to BofA pursuant to the terms of the 2007

Consolidated Loan, as of June 4, 2012, the principal sum of $4,686,431.47, plus accrued and

accruing interest and default rate interest, late charges, contractual costs and attorneys’ fees, and

all other charges due to BofA under the 2007 Consolidated Loan.

47. Despite written demand therefore, to date K. Swig has failed and refused to repay

to BofA the outstanding indebtedness which is due and payable to BofA in connection with the

2007 Consolidated Loan.

The 2009 Loan Defaults

48. The 2009 Note provides that the 2009 Loan will be deemed in default upon any

failure to “pay the full amount of each payment on the date it is due.. . .” See, Exhibit L, 6(B).

49. The 2009 Note also provides that, upon payment default, BofA may send written

notice advising the Borrower that if the overdue amount is not paid within 30 days of said notice,

BofA may require the immediate payment in full of all outstanding principal and interest, See,

Exhibit L, 7 6(C).

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50. K. Swig defaulted under the terms of the 2009 Note and the 2009 Security

Agreement (the “2009 Loan Documents”) by failing to pay the required monthly interest

Payments, aggregating $284,140.69, which were due pursuant to the terms of the 2009 Note on

June 14, 2009, July 14, 2009, August 14, 2009, September 14, 2009 and October 14, 2009 (the

“Past Due Payments”).

51. Accordingly, by letter dated November 10, 2009 (the “2009 Loan Default

Notice”) BofA notified K, Swig that, if the Past Due Payments were not paid by December 14,

2009, BofA would exercise its right to accelerate and declare all sums outstanding under the

2009 Loan to be immediately due and payable in full. A copy of the 2009 Loan Default Notice is

annexed hereto as Exhibit “R.”

52. The Past Due Payments were not paid by December 14, 2009 and, in fact, no

payment of any kind has been received in respect of the 2009 Loan since June 14,2009.

53. Accordingly, by letter dated December 21, 2009 (the “2009 Loan Acceleration

Notice”), BofA notified K. Swig that, as a result of his failure to make the Past Due Payments by

December 14, 2009, Bof’A had elected to accelerate the 2009 Loan indebtedness and declare all

sums outstanding under the 2009 Loan to be immediately due and payable in full. A copy of the

2009 Loan Acceleration Notice is annexed hereto as Exhibit “S.”

54. The 2009 Security Agreement executed by the Swigs provides that upon the

occurrence of an event of default, the Lender may:

without notice to or demand upon the Debtor (except to the extent required by applicable law), declare any or all of the Obligations immediately due and payable and . . . shall have the following rights and remedies (to the extent permitted by applicable law) in addition to all rights and remedies of a secured party under the UCC, or of the Secured Party under any of the other Loan Documents, all such rights and remedies being cumulative, not exclusive and enforceable alternatively, successively or concurrently: the Secured Party may at any time and from time to time take possession of the Collateral, and/or sell, resell, lease, assign and deliver, or otherwise dispose of any or all of the

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Collateral for cash and/or credit, and upon any terms, at such places(s) and timels), and to such persons, firms or corporations, as the Secured Party deems best.. . .

See, Exh, M, at 7 7 (emphasis added).

55. Both K. Swig and E. Swig also agreed, under the terms of the 2009 Security

Agreement, to pay “all out-of-pocket expenses incurred by the Secured Party in connection with

the perfection or enforcement of this Security Agreement including, but not limited to, the fees

and expenses of counsel to the Secured Party.” See, Exhibit M, at 7 11 and 7 3(0).

56. The 2009 Note also provides that K. Swig is liable for all costs and expenses

incurred by BofA in enforcing the 2009 Note, including reasonable attorneys’ fees. See, 2009

Note, at Exhibit L, at 7 6(F).

57. As a result of the payment defaults, BofA is presently entitled to immediate

payment in full of the 2009 Loan,

58.

59.

BofA has performed all of its obligations under the 2009 Loan Documents.

There is presently due and owing to BofA pursuant to the terms of 2009 Loan

Documents, as of June 4, 2012, the principal sum of $12,800,000.00, plus accrued and accruing

interest, contractual costs and attorneys’ fees, and all other charges due to BofA under the 2009

Loan.

60. Despite written demand therefore, to date K. Swig has failed and refused to repay

to BofA the outstanding indebtedness which is due and payable to BofA in connection with the

2009 Loan.

The N.Y. U.C.C. 9-611(fl Notice

61. On June 1, 201 1, BofA sent to the Swigs a notification letter pursuant to N.Y.

York Uniform Commercial Code, McKinney’s Supp. 2010 (the “NYUCC’) 5 9-61 l(f) (the “9-

61 103 Notice). A copy of the 9-61 1 ( f ) Notice is annexed hereto as Exhibit “T.”

16 5033875v.4


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62. On June 3, 201 1, BofA filed with the New York State Banking Department (now

known as the New York State Department of Financial Services) a copy of tho 9-6 1 1 ( f ) Notice

sent to each of the Swigs, in accordance with N.Y. R.P.A.P,L. 5 1306. A copy of the electronic

receipts, bearing tracking numbers NYS2358185 and NYS2358228, are annexed hereto as

Exhibit “U”,

63. Pursuant to NYUCC Article 9, BofA is required to wait until at least 90 days have

elapsed from the sending of the 9-61 1 ( f ) Notice prior to disposing of the Shares and Proprietary

Lease.

64. BofA is presently the owner and holder of the 2007 Consolidated Loan

Documents and the 2009 Loan Documents and, on that basis, has standing to maintain this

action.

65. The subject loans are neither “high-cost home loans” nor “subprime home loans”

as defined in N.Y. R.P.A.P.L. Q 1302 and sections 6-1 and 6-rn of the N.Y. Banking Law.

The Wrongful Re-Issuance of the Share Certificate

66, Subsequent to the initial payment defaults under the Loans, representatives of

BofA and BofA’s counsel met with counsel for defendant K. Swig.

67. During that meeting, counsel for K. Swig advised BofA that, on or about January

2, 2002, a replacement stock certificate (the “Replacement Share Certificate”) had been issued

in the name of’ E. Swig, only, for the 845 Shares appurtenant to the Co-op Apartment. A

purported copy of the Replacement Share Certificate provided by counsel for K. Swig to BofA is

annexed hereto as Exhibit “V”.

68. The issuance of the Replacement Share Certificate was in wrongful violation of

BofA’s pre-existing security interest in the Shares.

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The Final Demand For Payment and Surrender of the Replacement Share Certificate

69. By letters dated May 31, 201 1 (the “Final Demands’? SofA made final demand

for payment in full of each of the Loans from K. Swig. A copy of each of the Final Demands is

annexed hereto as Exhibits “W” and “X”.

70. Copies of each of the Final Demands were also mailed to E. Swig, via certified

and first class regular mail. See, Exhibits “W” and “X”, annexed hereto.

71. In the Final Demand, BofA also demanded that the Swigs deliver to BofA the

original current stock certificate for the Shares allocated to the Co-op Apartment.

72. Despite due demand of the amounts due and owing under the terms of the Loans,

the outstanding indebtedness has not been paid.

73. Despite demand for the turnover of the original current stock certificate for the

Shares allocated to the Co-op Apartment, the original stock certificate has not been turned over

to BofA.

Additional Events of Default

74. Since the mailing of the Final Demands, the 2009 Loan has matured. The Swigs

failure to repay to BofA all obligations due and owing under the 2009 Note at its January 14,

201 2 maturity is an additional event of default under the 2009 Loan,

AS AND FOR THE FIRST CAUSE OF ACTION AGAINST K. SWIG AND E. SWIG

(Enforcement of Security Interest)

75. Plaintiff refers to and realleges each of the foregoing allegations of this Complaint

as if more fully set forth herein.

76. To perfect its security interest in the Collateral and in order to notify others of its

interest in and to the Collateral, BofA (or its predecessor by merger, U.S. Trust), filed UCC-1

Financing Statements with the New York City Department of Finance Office of the City Register

18 5033875v.4


on December 18, 1998 under record number 98PN66689; on December 11, 2002 as record

number 02PN32992; and on February 16,2009 as record number 2009000045203. See, Exhibits

“F” and “P” hereto,

77. Pursuant to Section 9-601 of the NYUCC, BofA presently has the right to enforce

its security interest in the Collateral by reason of the defaults described herein.

78. As a result of the defaults under the 2007 Consolidated Loan Documents and the

2009 Loan Documents (collectively, the “Loan Documents”), BofA is presently entitled to, inter

diu: (a) take possession of the Collateral; and (b) dispose of the Collateral by selling same in

accordance with the provisions of NYUCC.

79. Accordingly, BofA is entitled to entry of a Judgment:

1.

.. 11.

... 111.

iv.

V.

vi.

enforcing BofA’s first priority security interest in and lien upon the Collateral and determining that any claims and/or liens held by any of the Defendants are subordinate to the lien of BofA, subiect only to such priority statutory lien claims as may be proven by defendant 740 Corp.;

awarding BofA immediate possession of the Collateral and possession of the Co-op Apartment covered by said Shares and Proprietary Lease;

adjudging that the defendants and each of them and all persons claiming under them or any of them be barred of and from all estate, right, title, interest, claim, lien and equity of redemption of, in and to said Shares and Proprietary Leasc and each and every part and parcel thereof;

ordering K. Swig and E. Swig to immediately turn over to BofA the Replacement Share Certificate (or any subsequently issued and outstanding certificate evidencing the Shares) and the original Proprietary Lease;

adjudging that the defendants K. Swig and E. Swig be directed to surrender possession of the premises covered by said Proprietary Lease directly to BofA or to any purchaser of the Shares at any NYUCC Article 9 sale to be conducted by BofA;

ordering that BofA be paid all amounts due under the Loan Documents and appointing a referee to hear and report as to the amounts due, including but not limited to all principal and interest accrucd through the date of such paymcnt, thc expenses of such sale, rcasonable attorney’s fees, and all other costs, allowances and clisburserncnts of this action and any nionies advanccd

19 5033875v.4


m a a a

vii.

viii.

ix.

and paid by BofA lo protcct and prcscrvc its rights in and to said Sharcs and Proprictary Lease, with interest upon said amounts from thc datcs of the respective payments and advances thereof as h r as the amount of such monies properly applicable thereto will pay the same;

establishing BofA’s right to dispose of the Collateral in accordance with provisions of NYUCC Article 9 and to apply the proceeds thereof to the obligations and liabilities of K. Swig and E. Swig to BofA under the Loan Documents; subject only to (A) the covenants, conditions, limitations and requirements stated in the Proprietary Lease; and (B) such priority statutory lien claims as may be proven by defendant 740 Corp., including unpaid maintenance charges, assessments and other charges, if any;

ordering that the defendant K. Swig pay the whole residue of the debt remaining unsatisfied after a sale of the said Shares and Proprietary Lease and the application of the sale proceeds to the indebtedness determined by the referee to be due under the Loan Documents; and

for such other and further relief or both in the premises as may be just and equitable.

AS AND FOR THE SECOND CAUSE OF ACTION AGAINST K. SWIG AND E. SWIG

(Replevin)

80. Plaintiff refers to and realleges each of the foregoing allegations of this Complaint

as if more fully set forth herein.

81. Pursuant to the terms of 2007 Consolidated Security Agreement and the 2009

Security Agreement (collectively, the “Security Agreements”), upon the occurrence of events of

default thereunder BofA would, in addition to all rights and remedies of a secured party under

the Uniform Commercial Code, be entitled to, inter alia, take possession of the Collateral and/or

sell, resell, lease, assign and deliver or otherwise dispose of any or all of the Collateral for cash

andlor credit.

82. As set forth above, K. Swig defaulted under the Loans and K. Swig and E. Swig

defaulted under the Security Agreements, entitling BofA to possession of the Collateral.

20 5033875v.4


a . -

f a I) I)

83. Upon information and belief, the Collateral is in the possession of K. Swig and/or

E. Swig and is located at Unit 2/3D, 740 Park Avenue, New York, N.Y. and/or other locations

which are unknown to BofA,

84. The items subject to replevin are more specifically described as the Collateral.

85 . By the Final Demands dated May 31, 2011 (Exhibits bbW” and ‘(X” hereto),

BofA demanded possession of the Collateral.

86. Despite due demand, the Collateral remains wrongfully withheld from BofA.

87. Accordingly, BofA is entitled to entry of a judgment directing the Defendants to

honor the terms of the Loan Documents and to turnover immediate possession of the Collateral

to BofA and for such other and further relief or both in the premises as may be just and equitable,

WHEREFORE, Plaintiff BofA respectfully requests a judgment as follows:

(a) On its first cause of action ordering and adjudging that:

i. BofA has a first priority security interest in and lien upon the Collateral and any claims andor liens held by any of the Defendants are subordinate to the lien of BofA, subiect only to such priority statutory lien claims as may be proven by defendant 740 Corp.;

.. 11. BofA be awarded immediate possession of the Collateral and possession of

the Co-op Apartment covered by said Shares and Proprietary Lease;

iii. the defendants and each of them and all persons claiming under them or any of them be barred of and from all estate, right, title, interest, claim, lien and equity of redemption of, in and to said Shares and Proprietary Lease and each and every part and parcel thereof;

iv. K. Swig and E. Swig be required to immediately turn over to BofA the Replacement Share Certificate (or any subsequently issued and outstanding certificate evidencing the Shares) and the original Proprietary Lease;

v. K. Swig and E. Swig be required to immediately surrender possession of the premises covered by said Proprietary Lease directly to BofA or to any purchaser of the Shares at any NYUCC Article 9 sale to be conducted by BofA;

21 5033875v.4


Dated:

vi.

vii.

... v111.

ix.

a

BofA bc paid all aniounts due undcr the Loan Documcnts and appointing a referee to hear and report as to the amounts due, including but not limited to all principal and interest accrued through the date of such payment, the expenses of sale of the Collateral, rcasonablc attorney's fees, and all other costs, allowances and disbursemcnts of this action and any monies advanced and paid by BofA to protcct and preserve its rights in and to said Shares and Proprietary Lease, with interest upon said aniounts from thc dates of the respective payments and advanccs thereof as far as the amount of such monies properly applicablc thereto will pay the samc;

BofA is entitled to proceed to dispose of the Collateral in accordance with provisions of NYUCC Article 9 and to apply the proceeds thereof to the obligations and liabilities of K. Swig and E. Swig to BofA under the Loan Documents; subiect only to (A) the covenants, conditions, limitations and requirements stated in the Proprietary Lease; and (B) such priority statutory lien claims as may be proven by defendant 740 Corp., including unpaid maintenance charges, assessments and other charges, if any;

the defendant K. Swig pay the whole residue of the debt remaining unsatisfied after a sale of the said Shares and Proprietary Lease and the application of the sale proceeds to the indebtedness determined by the referee to be due under the Loan Documents; and

for such other and further relief as may be just and proper;

(b) on the second cause of action, ordering and adjudging that the Defendants honor the terms of the Loan Documents and be required to turnover immediate possession of the Collateral to BofA and for such for such other and further relief as may be just and proper; and

(c) granting BofA such other and further relief as this Court deems just and proper.

New York, New York June 4,2012

WILSON, ELSER, MOSKOWITZ, e ,/ Kathleen A. Daly l ~ '

Marie Polito Hofsdal Attorneys for Bank of America, N.A. 150 East 42"d Street New York, NY 10017-5639

File No.: 1 1944.0005 1 (2 12) 490-3 000

22 5033875v.4


a a a

VERIFYING AFFIDAVIT

STATE OF RHODE ISLAND )

COUNTY OF PROVIDENCE ) ) ss.

Fred P. Lucy 11, of full age, being duly sworn, upon her oath, deposes and says:

1. I am a Senior Vice President of Bank of America, N.A., Plaintiff in this action. 1

am in charge of the loan to defendant Kent M. Swig and am fully familiar with the facts of this

case.

2. I have read the foregoing Verified Complaint and all the allegations contained

therein. Except as to allegations alleged upon information and belief, which allegations I believe

to be true, all the allegations in the Verified Complaint are true based on my personal knowledge,

from public records, the records of Plaintiff or information provided to Plaintiff by defendants

Kent M. Swig, Elizabeth M. Swig and/or ag

Corporation.

I: representatives of defendant The 740

Sworn and subscribed to before me this 9 7% day of June, 2012

NOTARY PUBLIC STATE OF RHODE ISlANO

23 503387Sv.4


* 1) I) e

Index No.:

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK

1 2 1 0 2 2 Q 2 Marie Polito H o f s d 11944,00051

BANK OF AMERICA, N.A.,

Plaintiff,

-against-

KEN?‘ M. SWIG, ELIZABETH M. SWIG, THE 740 CORPORATION, and “JOHN DOE #1” through “JOHN DOE #lo,” the last ten names being fictitious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises described in the Complaint,

Defendants,

SUMMONS, HELP FOR HOMEOWNERS IN FORECLOSURE AND COMPLAINT

~~

WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP

Allormysfor BANK OF AMERICA, N. A,

Office & Post Office Address, Telephone 150 EAST 42ND STREET

NEW YORK, NEW YORK 10017-5639 (2 12) 490-3000

Dated: New York, New York WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP Attorneys for Bank of America, N. A. Office and Post Office Address

15OEast 42”d Street New York, New York 10017-5639

File No. 11944,00051 Tel: (212) 490-3000
